Answers to your insurance questions

A recent ruling in court regarding an automobile insurance claim has overturned a denial due to the accident resulted from an intentional act. The insured is a woman whose daughter was driving mom's vehicle and deliberately caused a collision. She said that she was doing it to "test her mortality". The trial judge ruled that "on a balance of probabilities (the daughter) was suffering from an acute psychiatric disorder, such that she had no conscious or deliberate physical control of the operation of the motor vehicle due to the absence of a sane and deliberating mind."

A recent court case in the U.K. says that insurers are required to provide coverage when an insured deliberately causes damage to his or her property, as long as the insured was insane at the time the damage was done. The case in England was when a person deliberately set fire to his home when attempting suicide. The insurance company denied the claim based on the principle that you cannot recover insurance on your property that has been destroyed by your own illegal act.

The high court found that "where a claimant seeks to recover under a policy of insurance for the consequences of his own act in setting a fire, they will need to prove, on the balance of probabilities, that they were insane within the meaning of the M'Naghton Rules at the time of the fire."

The McNaghton Rule states "…to establish a defense on the ground of insanity, it must be clearly proved that, at the time of committing the act, the party accused was labouring under such a defect of reason, from disease of the mind, as to not know the nature and quality of the act he was doing; or, if he did know it, that he did not know it was wrong."

So now it might be considered under business insurance policies or other property policies that an act cannot be deemed intentional or even criminal if a person is insane at the time. It opens up a whole new area of "the devil made me do it."